The Cash account in the ledger of Hensley, Inc. showed a balance of $3,100 at June 30. The bank statement, however, showed a balance of $3,900 at the same date. The only reconciling items consisted of a $700 deposit in transit, a bank service charge of $7, and a large number of outstanding checks.
38. Upon completion of the bank reconciliation, a journal entry will be required to update the depositor’s accounting records. This entry will include a:
| Debit to Bank Service Charge Expense for $7. | |
| Debit to Cash for $7. | |
| Debit to Cash for $700. | |
| Credit to Cash for $700. |